June 7, 2013 / 12:42 PM / 6 years ago

TSX slumps to 1-month low as gold dives

TORONTO (Reuters) - Canada’s main stock index slipped to a one-month low on Friday as a slump in gold miners, which followed a tumbling bullion price, offset strength in several other sectors after a robust U.S. jobs report.

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

The market’s decline, its sixth straight daily drop, sharply contrasted with strong gains seen south of the border.

U.S. employers stepped up hiring in May in a show of economic resilience that analysts said suggests the Federal Reserve could begin to scale back its monetary stimulus later this year.

But fears that the Fed could turn off the monetary tap hit gold prices and diminished the precious metal’s appeal as a safe-haven asset. <GOL/>

“The jobs numbers show evidence of a grinding recovery in the United States, which is measurably positive, but not robustly so,” said Stephen Wood, chief market strategist, North America, at Russell Investments.

“The data suggests that there is no reason to think that the Fed’s going to deviate significantly from their current policy position.”

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 36.03 points, or 0.29 percent, at 12,373.30, after earlier slipping to its lowest since May 2. Seven of the 10 main sectors on the index were higher.

The index lost 2.2 percent on the week.

The Canadian market has been pulled down by the natural resources sectors, which have been hit by volatile commodity prices.

“Within equities, we have a pretty large tilt toward U.S. stocks and a pretty large tilt away from Canadian stocks,” said Geoff Stein, a portfolio manager with Fidelity Investments who helps manage about $55 billion in assets.

Stein is cautious about Canadian equities due in part to the weakness in the resource groups and the slowdown in the housing industry.

The benchmark Canadian index is in the red for the year, while the U.S. S&P 500 .SPX has gained 15.2 percent.

Gold stocks gave back 5 percent and dragged the materials group down 3.4 percent.

Goldcorp Inc G.TO slid 5.1 percent and Barrick Gold Corp (ABX.TO) declined 4.9 percent.

Financials, the index’s most heavily weighted sector, gained 0.3 percent. Manulife Financial Corp (MFC.TO) climbed 2.1 percent and had the biggest positive influence on the market.

Editing by G Crosse

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